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From A Barn To A $200 Million Enterprise: Mophie

There aren’t many multimillion dollar companies that can say they started up in a barn. Mophie, the Santa Ana, California-based smartphone accessory firm is one, and its steady sales growth suggests they won’t be…

Placing power sources inside the phone case has been a boon to Mophie.

Co-founders Daniel Huang and Shawn Dougherty kicked off their enterprise in 2006 as mStation, making speakers and cases for iPods and mp3 players. Then located in southern California, the duo decided to sidestep their company’s real estate costs by setting up shop in Dougherty’s barn back in Kalamazoo, Michigan, to make the best use of the $250,000 they’d bootstrapped between them.

“I packed up, I went back to Michigan, I bought the house next to my family home and it had a 3,000 square foot pole barn on it,” says Dougherty, Mophie’s COO. Her family’s barn – and those of friendly neighbors – provided added space for the burgeoning company’s launch. “We were dropping containers on the property.”

The first year brought in $1 million in sales, selling predominantly in North America, and attracted about a half million dollar investment from NBA star Carmelo Anthony (they later bought him out). That capital allowed the company to stock up on inventory, move from Kalamazoo to Paw Paw and acquire Mophie in a 2007 asset purchase.

Mophie, an AppleApple device accessory company then generating about $2 million in revenue, opened up a larger market for mStation. “What we got from them that we didn’t have was a global Apple retail presence, customers in 60 plus countries and a diversification into the case business.”

Huang, now CEO, had foreseen the integration of music playback in smartphones and bet that when consumers began using their phones for music – on top of an increase in email sending and general use – those mobile devices would be starved for power. “Every device, whether it’s Apple or Android, smartphone or tablet, mP3 player or handheld gaming device, is drawing battery every moment its turned on,” he said. A design for a supplemental power source, built into the case, soon followed, just in time for the release of the iPhone.

Mophie COO Shawn Dougherty

“We knew that the company was going to almost immediately begin to move away from being mStation, move away from speakers, move away from just cases and move into the intelligent case business,” Dougherty says.

In 2008, with its first iPhone ‘juicepack’ in hand, Mophie generated approximately $2.6 million in sales. Today the company builds several versions of such cases for the popular smartphone as well as products for iPads, Samsung and HTCHTC phones, plus energy packs for mobile devices. Mophie is on track to generate about $200 million in sales in 2013.

Daniel Huang, CEO of Mophie

Private equity firm Beringea led a $4 million round in 2010. Jeff Bocan, a partner with the firm, acts as Mophie’s senior VP. “First we were in the Apple Store and most of the revenue came from Apple and then Apple premium resellers,” Bocan explained. The wireless carriers came next and the company’s products started showing up in AT&TAT&T and Verizon retail shops, followed by larger big-box stores like Best-Buy and Target. “Over 85% of our revenue are in the U.S. and Canada and there’s a big world out there that we have yet to spread the Mophie love out to.”

The next phase of growth is breaking into international markets and to do that the company intends to bulk up its sales force and invest in marketing. Offices in the Netherlands and Hong Kong are on the way to convince carriers in Asia and Europe – as well as established accessory retailers – to sell Mophie products.

On the horizon, the company is focusing on developing other types of what its founders call “smart cases.” Essentially a device case that has other functions, in addition to keeping your phone from damage.

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